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Ingredients of a Contract

   

Added on  2020-03-23

8 Pages2666 Words84 Views
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2ContentsAssignment..................................................................................................................................................3Solution 1: Ingredients of a contract...................................................................................................3OFFER................................................................................................................................................3ACCEPTANCE...................................................................................................................................3CONSIDERATION.............................................................................................................................3INTENTION TO BE IN LEGAL RELATION....................................................................................3CAPACITY OF THE PARTIES.........................................................................................................4Solution 2:Oral and written contracts................................................................................................4Oral contract........................................................................................................................................4Written contract ..................................................................................................................................4Oral or written contract?......................................................................................................................4Solution 3:A Formal Contract – Definition and requirements...........................................................5A formal contract.................................................................................................................................5Formalities...........................................................................................................................................5Solution 4Intention of the parties to be in contractual relation (Assignment case)...........................5Issue Involved......................................................................................................................................5Relevant Law.......................................................................................................................................5Application of law...............................................................................................................................6Conclusion...........................................................................................................................................6Solution 4:Relationship – Principal- Agent - Independent contractor...............................................6Conclusion...................................................................................................................................................7Bibliography................................................................................................................................................8

3AssignmentSolution 1: Ingredients of a contractAn agreement is formed between the parties when an offeror (the person who makes an offer)makes an offer to an offeree (the person who receives the offer) and the same is acceptedby an offeree. An offer upon being accepted takes the shape of an agreement between theparties. A contract is an agreement which can be enforced through law. But, a contract isformed when there is intention of the parties to be in contract, capacity of the contractingparties and consideration in exchange of promise to be performed. Thus, the variousingredients for the formation of a contract are: (McKendrick & Liu, 2015)OFFERAn offer is the intent of an offeror which can be in written or oral form through which heexpresses his desire to be in contract with an offeree. The offeror expresses the act ofomission which he desires to be undertaken by the offeree (MacRobertson Miller AirlineServices v Commissioner of State Taxation, 1975). An offer must be communicated in orderto be complete. In case the offer is not communicated to the person for whom it isintended then the same is not said to be complete. An offer can be a general offer, that is,for world at large or for a specific person. ACCEPTANCEAn acceptance is said to occur when an offer made is assented by the offeree. The acceptancemust be equal to an offer. If it is different from an offer then it is not considered as a validacceptance and thus the same is termed as a counter offer, which can be accepted orrejected by an offeror. Acceptance must be clear and must be made prior to revocation ofan offer. Acceptance is only complete when the same is communicated to an offerorexcept in postal rule where the acceptance is concluded upon postage of letter ofacceptance (Entores Ltd v Miles Far East Corporation, 1955).CONSIDERATIONConsideration is the advantage which the performer of the promise gets upon performing thesame. Consideration is the motivation towards the performance of promise. Considerationmust be present in order to validate a contract. It is a vital ingredient of a contract. It mustbe sufficient even if it is inadequate (Placer Development Ltd v Commonwealth, 1969).INTENTION TO BE IN LEGAL RELATIONThe parties must have intention to be in legal relation with each other. In case the parties do notintend to bind them legally over a contract then there cannot be a contract. In case ofsocial contracts, it is presumed that the intention is absent unless it is disapproved and incase of commercial transactions the same is presumed to be there till the same isdisapproved (Evans v FHCSIA,, 2012).

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